A Unicorn Lost in the Valley, Evernote Blows Up the ‘Fail Fast’ Gospel

“Remember Everything” is one of Evernote’s slogans. It’s been a remarkable journey. From its origins as a simple note-taking app, Evernote hit euphoric highs. Job-seekers submitted elaborate, unsolicited application videos, like Karen X. Cheng, a designer, who filmed herself performing a song she wrote about her dream gig at the company. (“I wanna help the world remember / I wanna go extend their brains,” she sang.) Some who did get hired describe feeling as if they’d won “American Idol.” The company reached unicorn status in 2012. The next year, Phil Libin, a showman-style chief executive, declared that Evernote aspired to be “the Nike for your mind.”

It seemed natural for Evernote the Lifestyle Brand to use its hundreds of millions in venture capital to expand in every direction. In addition to its flagship app, Evernote built a chat app, a recipe app, a contacts management app and a flashcard app. It hosted elaborate conferences for its partners and users. It sold business gear — including $32.95 Evernote-branded Moleskine notebooks — in an ambitious e-commerce effort. It struck a partnership to digitize Post-it notes. It had more than 150 million registered users, and Mr. Libin talked up his vision of a “100-year start-up.”

When Evernote’s growth began to slow in 2015, though, the company replaced Mr. Libin with Chris O’Neill, a former Google executive. He laid off employees, scaled back side projects, canceled lavish perks like a weekly sushi lunch and free house cleaners, shuttered three international offices, and hiked the price of an Evernote subscription. His strategy was to focus Evernote on business software, and compete with more robust enterprise offerings. But Evernote’s product lacked essential features, and the distinct versions of its apps on Windows, iOS and Android systems made collaboration across devices and teams difficult, former employees say. Sales of Evernote’s business product never exceeded 15 percent of revenue, according to two people familiar with the company.

Employees wishfully passed along rumors about a buyout from Microsoft or Google. A sense of malaise crept into team meetings, where employees gathered on a wide staircase with seat cushions in the center of the building under a large cardboard elephant head mount. “You got this collective sense of, ‘It’s fine, but it’s probably not going to be successful,’” a former employee said.

Start-ups rarely drop the veneer of perpetually “crushing it,” no matter how ugly things get. But in the summer and fall of 2018, four top executives quit. An August article in the New York Times Styles section about Mr. O’Neill’s workout routine came off as oblivious, and he soon left the company too. Within a few months of replacing him, Mr. Small calculated that he could not ignore the swell of angry message board posts and “death spiral” headlines.

He published an unusually frank blog post aimed at Evernote’s users in January. The company’s foundation was not strong, he wrote, and its products had developed a “unique collection of bugs and undesirable behaviors.” It would take most of the year to get all that fixed, he wrote, adding that “undoubtedly we will still disappoint some of you.”